Grandparents may not take up full-time child care due to Budget

Grandparents are unlikely to become full-time carers for their grandchildren
under Budget plans as they will not be paid, campaigners warned.

It is estimated that one in four families now relies on grandparents to look after children on a regular basisPhoto: GETTY

By Martin Beckford, Social Affairs Correspondent

6:30AM BST 24 Apr 2009

Under a scheme announced by Alistair Darling, the Chancellor, working-age grandparents who give up their jobs in order to look after young grandchildren will receive a boost to their retirement funds.

The move will earn them National Insurance credits to ensure they receive the full state pension of £90.70 a week, which they would not normally get if they stopped working before retirement.

The Treasury estimates that 45,000 grandmothers and grandfathers of children under 12 will benefit when the scheme begins in April 2011 as increasing numbers of couples rely on them to look after their young families. Older relatives are said to provide £3.9billion worth of free child care every year.

However doubts have been raised as to how many people will choose to take up the option to become childminders for more than 20 hours a week, as they will not be paid for their services and are likely to have to give up paid employment to fit in their new role.

Campaigners have been calling for working families to be able to use child tax credits – which reimburse them for as much as 80 per cent of their child care costs, up to a maximum of £175 a week for one child – to pay grandparents.

However the Government did not take up this option in the Budget, restricting the beneficiaries of scheme to registered childminders and nurseries.

Toby Ryland, a partner at the chartered accountants Blick Rothenberg, said: "The token gesture of allowing grandparents of working age who look after their grandchildren to 'earn' credit towards a state pension is welcome, but falls far short of the immediate financial help that this important support network desperately needs."

Sam Smethers, the chief executive of Grandparents Plus, said that the issue of financial support for older people who provide child care would have to be tackled eventually.

"When we called for this we were trying to provoke a debate but we understood it wasn't going to happen this year.

"We're realistic, we understand that there isn't very much money around.

"But grandparents are playing an ever-growing role so we are going to have to think about the contribution they are making.

"We are pushing them in different directions – we expect them to stay in work longer but also to provide child care.

"We have to think about how we expect that generation to combine work and care."